Johor SMEs expect knock-on effect from virus outbreak


  • Metro News
  • Saturday, 08 Feb 2020

Many SMEs rely on supply of raw materials and parts from China, and may be affected if the supply chain is threatened by the coronavirus outbreak. — Filepic

JOHOR BARU: The Johor Baru-based small and medium enterprises (SMEs) are expected to face tough times following the outbreak of novel coronavirus (2019-CoV).

Johor South SME advisor Teh Kee Sin said the economy of neighbouring Singapore, whose major source of income is from the hospitality-related trade, could be affected due the coronavirus threat.

“Many SMEs in the south are heavily dependent on producing products and services for the Singapore market. The chain effect will post hardship to many SMEs here in the long run, ’’ he said when contacted.

He said China was also a major consumer market, especially in the tourism industry where around 150 million mainland Chinese people travel throughout the world yearly.

“They are frequently considered high spenders, ’’ said Teh.

He said in this regard, the hospitality industry would be badly affected, especially airlines, travel agencies, hotels, retailers and many other related industries.

Teh said China’s Road and Belt initiatives, which had been pouring millions in investments in this region, might also be affected as the country grappled with its domestic priorities.

“Given this, Iskandar Malaysia which is targetting at China investments as well as property buyers may suffer a setback, as it may take many years to get the situation back to good order, ’’ he said.

He added that as China was the world’s factory, many countries connected to them by trade would be affected in the event of a breakdown of supply line for parts.

Teh said the SMEs were expecting the government to roll out some kind of emergency business relief to help industries hit by the knock-on effects of the coronavirus outbreak.

“Maybe the government could consider low interest funding or grants to assist the SMEs in riding out the tough business environment ahead, ’’ said Teh.

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